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Why those who can least afford betting practice it the most

Post Date: 19 July 2016 | Category: Finance | Hits: 17790

For the past three years, the Country has witnessed the proliferation of gambling firms which has seen the industry diversify from early gambling modes like Casinos to new modes like sports betting, lotto lottery and online betting. Specifically, sports’ betting has grown in popularity especially among the youth and is currently the number one gambling activity in Kenya.

The industry has equally grown at an unprecedented rate with tax collections growing and this is evident going by the statistics released by PWC in the last quarter of 2015 indicating that the annual gross turnover of sports betting is Ksh. 2.1 Billion. According to PWC, the figures are projected to grow to more than Ksh. 5.1 Billion in the next three years.

Gambling industry is perceived as one of the unexploited potential tax bases that could be tapped into to finance some of the priorities in the national budget. In some countries like South Africa, gambling industry has generated substantial resources to fund government priorities or projects and created employment.

Unfortunately, the lottery and gambling industry is associated with undesirable socioeconomic problems. For instance, gambling participation may negatively affect gamblers themselves through financial and family distress caused by problem gambling, and through negative externalities imposed on the community, such as increased crime (Kearney 2005). Subsequently, there is a need to achieve a balance between addressing government revenue needs and the social costs that go along with legalized gambling.

As the gambling industry continues to grow in leaps and bounds, a well-founded comprehension of the sector and its socioeconomic effects on the Kenyan economy and society is imperative.

Gambling is a risky behavior that is associated with considerable socio-economic problems. For instance a gambler would rather spend less on household needs or even forfeit savings which could be handy in future at the expense of buying lottery tickets or tempting sports betting odds. Gambling only encourages laziness and drives away most people from engaging in constructive activity as it gives false hope of quick riches. One in a million people benefit from this risk taking activity.

Research confirms that the poorest in the society spend a higher proportion of their personal income on gambling compared to their richer counterparts. Gambling widens inequality and its social impact, including cases of addiction (problem gamblers), domestic violence and/divorce, depression and even suicide has far reaching consequences than the gains it appears present.

Phenomenon growth of this industry coupled with other factors like low-income level, education level, social status, age, high rate of unemployment, self-perceived deprivation are some of the determinants that has influenced gambling participation.

Economists view gambling participation as a rational wealth maximizing strategy for the middle and lower-middle classes. Once basic needs are fulfilled and the opportunity costs for lottery tickets are low, playing the lottery can be reconstructed as a rational choice for those who otherwise lack the means to accumulate substantial wealth.

Betting or lottery play is either socio-structurally explained, arising from tensions and frustrations caused by disadvantaged positions, or culturally from shared beliefs in fate or luck. It is “a ‘safety valve’ through which the repressed or oppressed are exploring ways of escaping poverty, and it maintains hope for material success and relieves strain “in a socially acceptable” manner. For instance, high level of unemployment is one of the major determining factors pushing many Kenyans especially the youth to resort to gambling as an alternative source of livelihood.

Participation in gambling provides a form of catharsis, giving an outlet for feeling of disadvantage and dissatisfaction about one’s own status. Lotteries and betting offer prizes that can fundamentally transform the winner’s material situation. We have seen how jackpots from Lotto lottery and/sports betting yields sums of millions of shillings.

One of the central attractions of the game is that it evokes daydreams of desired but unachievable status positions. Lottery players “indulge in fantasies about what could be done with the prize money”. This “lure of the lottery” makes lottery tickets not a monetary investment but rather a trigger for daydreams, a vehicle for the momentary escape from reality.

Fantasy worlds stemming from the purchase of lottery tickets are comparatively cheap. Lower social strata are excluded from most other “evocative” consumer goods that also create dream worlds, for example status goods such as fine clothing, wines, luxury apartments or cars etc.

Because of this relative exclusion from alternative opportunities for imaginative goods consumption, individuals from lower social strata are more likely to be drawn to gambling than members of higher social strata.

The gambling industry is regulated by law under the Betting Control and Licensing Board and guided by the Betting, Lotteries and Gaming Act of 1991. The policy and legislation relating to this industry is detailed but there is poor implementation of the law. BCLB must ensure that firms which operate this business meet the requirements like proper certification, conduct quarterly inspection and elimination of illegal gambling set up near schools especially in poor neighbourhoods as this may have negative effects in terms of school attendance and performance among others.

Betting Control and Licensing Board has been faulted for not doing enough to minimize the negative social and economic impacts of gambling by promoting responsible gambling. The public should be protected from over stimulation of latent gambling through limitation of gambling opportunities and this can be done by imposing tighter restrictions on advertising, tighter restrictions on entry into gambling establishments based on age, and ban importation of cheap gambling machines from China among others.

BCLB should adopt proactive approach to problem prevention by ensuring that the public are well informed about the potential risks associated with gambling as this would have a significant effect on the eventual socio-economic impacts of gambling before many Kenyans especially the youth "gamble away their life".

[1] Why the Poor Play the Lottery: Sociological Approaches to Explaining Class-based Lottery Play by Jens Beckert and Mark Lutter